FDA alert on finasteride could elevate churn for Hims & Hers, says BofA

BofA notes that the Food and Drug Administration issued an alert on the potential risks associated with compounded topical finasteride products and argues following the alert that Hims & Hers and some of its private peers may elect to shift patients from topical finasteride to an oral version of the drug, which Hims already sells. If patients are required to shift from a topical formulation to an oral alternative, Hims could see elevated churn in the near-term, says the firm. While it is unclear if this FDA alert will result in any change to formulations by Hims or its peers, the firm flags the news given the elevated focus on growth trends in the core franchise and maintains an Underperform rating on the shares.